Canada’s young professionals and families who are getting their homes for the first time are now spending more than any other generation, according to a fresh report from the national mortgage industry association.
In its latest survey, Mortgage Professionals Canada noted that from 2014 to 2016, first-time buyers across the country have average down payments of an all-time high of 23 per cent—higher than the 22 per cent average of buyers from previous generations, , Better Dwelling reported.
In addition, the study found that roughly 51 per cent of first-time buyers utilized their personal savings to fund their down payments. Meanwhile, 19 per cent acquired loans from financial institutions or secured the help of their parents.
Back in December, Statistics Canada cautioned that young professionals nationwide have been labouring under far worse conditions than their counterparts in other generations, with the youth unemployment rate over a period of 4 decades (from 1976 to 2015) being around 2.3 times higher than the rate among workers older than 25 years old.
Less young Canadians are also working in full-time positions today than in 1976, StatsCan added.
UBC School of Population policy professor Paul Kershaw and York University finance professor Moshe Milevsky warned that the prohibitive prices today—which have prevented a significant portion of the millennial consumer base from getting into home ownership—could trigger a domino effect that might harm the long-term prospects of the entire Canadian real estate sector.
“If people stop making initial acquisitions there is a possibility that further sales and other parts of the retail sector will slow down and then that will have an impact on the price people can sell their homes,” Kershaw said.
“The last thing we want is to be a commodity labour market. What's stopped us from doing that is the connections we've had to our community. If the younger generation sees housing as unaffordable and uninteresting they're more likely to move internationally,” Milevsky agreed.
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